Last week, government announced that it had allocated GHc80 million for capital expenditure in the agriculture sector out of the Annual Budget Funding Amount. Of this, GHc45 million is to be spent on five irrigation projects and another GHc35 million will be used to provide 29 warehouses nationwide. At about the same time a US$180 million credit facility from the Indian government for nationwide irrigation too.
All this is good, timely news. Agriculture has always been recognized as crucial to Ghana’s economic wellbeing although public spending on improving productivity and output in the sector has always been grossly insufficient. We hope that the latest news about funding for farming activities coming on the back of initiatives such as “Planting for food and jobs” marks the beginning of a new era in which agriculture gets the financial support it both needs and deserves.
Increased agricultural activity can generate direly needed jobs all around the country and especially in rural Ghana which needs them the most. It can create wealth and alleviate poverty nationwide as well. Add to this its crucial roles, both in import substitution which can drastically lower Ghana’s inordinate food import bill and in the provision of industrial inputs for the manufacturing sector; indeed the neglect that agriculture suffers in this country is truly baffling.
Now though, increased agricultural output is becoming even more crucial than ever before for several reasons.
Chief among them is that new trade treaties with both the European Union and the rest of Africa – the latter through the African Free Trade Agreement which is now commencing – means that import tariffs on food imports will be cheaper and more plentiful than ever before. Another is that most of the over 200 manufacturing facilities being developed under government’s one district one factory flagship initiative are agro processing facilities and they will need huge amounts of agricultural produce of various types as industrial inputs.
Thus the need to modernize Ghana’s agriculture using improved seed, all year round irrigation fed farming and technology for the impartation of crucial information and knowledge has become more urgent than ever before. But all of this requires financing and simply put, Ghana’s agricultural sector is not getting its fair share. The public sector wants improved agricultural activity to be private sector driven but the latter is hard put to attract the requisite financing on commercial terms for several reasons, all of them revolving around the perception of both lenders and entrepreneurs that agricultural financing is simply too risky.
There are several sectors of economic activity in Ghana that are far more glamorous than agriculture – for instance financial services, ICT and real estate – but none are more important than agriculture to the national economic well-being, and that of the citizenry. Which is why we hope that the latest announcements of financing for agriculture will usher in what the incumbent government during its early months in power described as a “Marshall Plan for Agriculture:” so named after the massive public spending on infrastructural spending to rebuild western Europe after the devastation of the second world war.
Similar public spending, by both Ghana’s government itself and by our development partners is now direly needed by the country’s agricultural sector right now.
